Worried About Customer Churn? Here is How CRM Helps Reduce It!

Customer churn is a phenomenon that affects businesses both large and small in equal measure. If you are in the business world, you understand the importance of retaining your customers. As a business owner, you spend a lot of time and money on acquiring new customers. But if you’re not successful in retaining them, it will be difficult for you to survive in today’s competitive environment. According to the Harvard Business Review, acquiring a new customer is five to 25 times more expensive than retaining an existing customer.

So, what should you do to reduce customer churn?

If you want to reduce customer churn, you need to make sure that you start using your CRM to its full potential. But before getting into how a CRM system helps reduce customer churn, let’s define it. According to TechTarget, “Customer churn, also called customer attrition, is the number of paying customers who fail to become repeat customers. In this context, churn is a quantifiable rate of change that occurs over a specified amount of time.”

In simpler terms, when a customer stops doing business with you, it is known as customer churn, attrition, turnover or loss.

How to calculate customer churn rate?

According to MyCustomer, the formula to calculate your churn rate is as follows:

# of churned customers/total # of customers

You can calculate the churn rate for a specific period of time (week, month, year). For example, say you run a SaaS company. As of September 1, the total amount of subscribers was 1,000. At the end of September, you report a total of 30 customers lost. The churn for the month of September would be calculated as follows:

30 subscribers lost in Sept./1,000 existing customers as of the beginning of Sept. = 3%

What causes customer churn?

Some of the major reasons customers churn are as follows:

  • Weak relationships
  • Unsatisfactory customer service
  • Poor onboarding
  • False promises
  • Irregular and erratic customer interaction


How a CRM solution can help reduce your customer churn

Customer churn is bad for any business. It is difficult to eliminate customer churn, but your priority should be to reduce it to the minimum. If you want to retain customers, you need to find ways to keep them happy. Implementing a CRM system is an excellent step that allows you to craft strategies to anticipate customer needs, head off possible issues and ensure they continue to feel valued.

A CRM system helps you on several fronts:

  • Allows you to build a strong relationship with your customers.
  • Improves your customer service vertical.
  • Helps you to stay in touch with your customers.
  • Improves communication with your customers.
  • Helps you improve the overall experience of your customers.


Here is how a CRM system can help reduce customer churn:

A CRM system helps you determine the cause of customer churn 

With a CRM system in place, you can get to know the reasons your customers are leaving – especially if you use data integration to sync your CRM with other systems in your organization. Whether it is because of pricing, poor quality, poor service, or neglect, you can determine the exact reasons for customer desertion. Once you know the reason, you can take steps to address your shortcomings to increase customer retention.

A CRM system helps you to engage your customers in a more meaningful way

 If you want to retain your customers, you need to engage with them effectively, communicating with them in a way that suits them. Some of your customers would prefer a phone call, others would want you to reach them via email, while a few would want to IM chat with you. With a CRM system in place, you can connect with your customers in a more meaningful and deeper way. Your CRM system allows you to find out the best possible way to reach your customers so that you keep them effectively engaged.

A CRM system helps you educate your customers on key issues that lead to churn

 If you can convince your customers and remove their doubts, they are less likely to desert you. For example, if your customers are concerned about your company’s high prices, you can convince them that the prices are high because you have to meet rigid industry standards, then chances are they will not leave you. You can help your customers to better understand the benefits of your product, which might convince them to continue to buy from you instead of switching to a competitor.

A CRM system helps you identify customers who are about to leave

If you know the customers who are planning to desert you, you can surely take corrective measures to stop them. With a CRM system in place, you can collect data that can identify the typical signs of a dissatisfied customer who is likely to leave. With their customer history in front of you, you can decide whether or not to invest more time and resources in that customer.

A CRM system helps you identify your most valuable customers

It is important for you to know your most profitable customers. With the CRM data, you can know your most valuable customers – those that are likely to stay with you and buy from you. A CRM system helps you identify your top customers, and you can take measures to treat them accordingly.

A CRM system helps you offer the right solutions and incentives to your customers

If you offer the right solutions and incentives to your customers, they are less likely to take their business elsewhere. There are many strategies that you can adapt to cultivate long-term customer relationships. With the right CRM solution, you learn which strategies and tactics will work for each particular customer.

If you’re considering a CRM solution for your business, we invite you to learn what 

eZnet CRM has to offer. Our industry-leading system allows easy, seamless management of every aspect of the customer experience. Make sure you don’t fall behind in this increasingly competitive business environment.

Contact us to learn more and get started with a free 30-day trial to be confident that eZnet CRM is the right choice.


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